{"id":70847,"date":"2017-04-09T09:26:47","date_gmt":"2017-04-09T13:26:47","guid":{"rendered":"https:\/\/stateofthenation2012.com\/?p=70847"},"modified":"2017-04-09T09:26:47","modified_gmt":"2017-04-09T13:26:47","slug":"china-and-russia-replace-us-dollar-as-reserve-currency","status":"publish","type":"post","link":"https:\/\/stateofthenation2012.com\/?p=70847","title":{"rendered":"China And Russia Replace US Dollar As Reserve Currency"},"content":{"rendered":"
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SLOW BUT SURE DEATH FOR THE U.S. DOLLAR? CHINA AND RUSSIA GETTING OUT OF GREENBACKS CONTROL<\/h1>\n

Malaysia Chronicle<\/p>\n

T<\/span>wo years ago, ICBC, the largest and most valuable bank in the world by total assets and market capitalization, was planning to open a clearing bank in Russia for trade settlements in Yuan (Renminbi) and Rubles.<\/strong> ICBC\u2019s business involvement include electricity, mining, chemical, oil and gas, telecommunication, retail, machinery and metallurgy sector in Russia.<\/p>\n

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It makes perfect sense to get rid of US dollar. Why must China and Russia conduct their business transactions using their rival\u2019s currency? The US dollar is so strong because 80% of world trade<\/strong> take place in US dollar. Besides military might and power, the high demand for US dollar is also driven by perception that it\u2019s the safest currency simply because US is also the world\u2019s biggest economy.<\/p>\n

\"China
\nLast month, China and Russia decided to break their dependency on US dollar<\/strong> in their bilateral trade and investment. Bank of Russia, the Russia\u2019s central bank, opened its first overseas office in Beijing on March 14. A week later, ICBC (Industrial and Commercial Bank of China) officially opens for business in Moscow \u2013 as a clearing bank for Yuan \/ Renminbi.<\/p>\n

\u201cFinancial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation. The launching of Renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation<\/strong> between the two countries.\u201d \u2013 said Dmitry Skobelkin, deputy governor of the Central Bank of the Russian Federation.<\/p>\n

\"China
\nYi Gang, vice president of the People\u2019s Bank of China, or China\u2019s central bank, called the moves as a sign that Sino-Russian ties and financial cooperation had reached a new level \u2013 \u201cChina and Russia\u2019s trade volume in 2016 reached US$59.5 billion. <\/strong>I\u2019m glad that the two countries\u2019 financial cooperation has also reached a new stage.\u201d<\/p>\n

According to\u00a0the Chinese State Administration of\u00a0Taxation, trade turnover<\/strong> between\u00a0China and Russia increased by\u00a034% in\u00a0January, 2017. Bilateral trade in\u00a0that month alone amounted to US$6.55 billion. China\u2019s exports to\u00a0Russia grew 29.5%, reaching US$3.41 billion, while imports from\u00a0Russia increased by\u00a039.3% \u2013 to US$3.14 billion.<\/p>\n

\"China-Russia
\nWith the creation of\u00a0the clearing banks<\/strong>, they enable the two countries to\u00a0further increase bilateral trade and investment while decreasing their dependence on\u00a0the US dollar. At the end of 2015, the Russian central bank announced the inclusion of the Yuan \/ Renminbi in its national foreign exchange reserves, making it Russia\u2019s officially recognized reserve currency.<\/p>\n

More importantly, the \u201cde-dollarization\u201d cooperation between Beijing and Moscow is also part of anti-money laundering<\/strong> and anti-terrorism<\/strong> efforts. However, amusingly, by creating a huge pool of Yuan \/ Renminbi liquidity in Russia, it appears China is creating a workaround solution to the sanction-hit Kremlin \u2013 a backdoor economic relief.<\/strong><\/p>\n

\"Russian
\n<\/strong>Coincidently, the setup of clearing banks at each other\u2019s side was timed in such manner that Russian Ministry of Finance is to launch US$1 billion worth of Yuan bonds.<\/strong> The bond issuance, scheduled to take place in one or two months, could be used as test bed for Moscow to raise more money in the future.<\/p>\n

Suddenly, Beijing is seen as providing a new breath of life to Russia\u2019s struggling economy. Screw the U.S. for slapping Russia with an \u201cindefinite\u201d\u00a0sanction\u00a0for its annexation of Crimea. And with President Trump screaming, whining and bitching about China\u2019s currency manipulation, the U.S. could do something as crazy as sanctions on China<\/strong> too.<\/p>\n

\"America
\nChina is also set to benefit greatly from gold imports from Russia \u2013 the world\u2019s fourth largest gold producer after China, Japan and the U.S. In May 2015, Beijing announced it had established a state-run gold investment fund, aiming to\u00a0bolster China\u2019s role in\u00a0global gold trade.\u00a0The new initiative is a part of\u00a0China\u2019s ambitious One Belt and One Road plan.<\/strong><\/p>\n

But for now, the main priority is to free both countries \u2013 long regarded as America\u2019s major enemies \u2013 from the clutches of American aggression <\/strong>in the form of US dollar. Although the amount is small, based on 2016\u2019s trade volume, the US dollar is losing at least US$59.5 billion in foreign exchange support. And that\u2019s just the beginning.<\/p>\n

\u2013\u00a0http:\/\/www.financetwitter.com\/<\/p>\n

___
\nhttp:\/\/www.malaysia-chronicle.com\/slow-but-sure-death-for-the-u-s-dollar-china-and-russia-getting-out-of-greenbacks-control\/#prettyPhoto<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

SLOW BUT SURE DEATH FOR THE U.S. DOLLAR? CHINA AND RUSSIA GETTING OUT OF GREENBACKS CONTROL Malaysia Chronicle Two years ago, ICBC, the largest and most valuable bank in the world by total assets and market capitalization, was planning to … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-70847","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/posts\/70847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=70847"}],"version-history":[{"count":0,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/posts\/70847\/revisions"}],"wp:attachment":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=70847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=70847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=70847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}